A dispute between prediction market operators and the American Gaming Association (AGA) has escalated over claims that US states and tribal governments have lost more than $1 billion in gaming tax revenue linked to prediction markets.
The AGA’s tracker, “State Gaming Tax Dollars Lost Since Prediction Markets Began Offering Sports Event Contracts,” estimates hypothetical revenue states could have collected if prediction market trades were taxed like traditional sportsbooks. The calculation focuses on growth in federally regulated event contracts.
Kalshi, the first prediction market to offer sports-event contracts ahead of Super Bowl 59 in 2025 under Commodity Futures Trading Commission (CFTC) oversight, has rejected the AGA’s claims.
A spokesperson for Kalshi, Elisabeth Diana, said, “This is fake math from casinos, who are worried about losing their monopoly power. Square that ‘math’ with the fact that the US gaming industry reached a record high last year – $78.7 billion in revenue.” She added, “This is an industry that preys on people who lose. Of course they’re ok spreading lies. People are coming to prediction markets because they’re fairer, safer, and less predatory than casinos.”
Regulatory and Revenue Dispute Intensifies
AGA President Bill Miller defended the estimate on CNBC, citing concerns from state officials.
“We recently had 41 Attorney’s General from around the country weighing in saying the (Commodities Futures Trading Commission) plays an important role in the nation’s economy, but they’re not the regulator of national sportsbooks. 41 attorneys general — that’s from every political stripe that there is in this country. It’s not about the AGA or the gaming industry, it’s about states and tribes that are losing literally $1 billion in state and tribal revenue that would otherwise go to fund important community projects and pay taxes to these states,” Miller said.
The AGA says platforms like Kalshi, Polymarket and Robinhood bypass state and tribal sportsbook rules, avoiding licensing fees and taxes.
Legal and Political Pressure Builds
More than a dozen states and tribes have filed lawsuits, issued cease-and-desist orders or introduced restrictions. Minnesota has banned prediction markets, with federal litigation underway, while at least 15 states have introduced 2026 measures targeting them.
The CFTC maintains jurisdiction over federally regulated contracts, creating a standoff with state regulators. Federal cases have also emerged, including charges tied to more than $1.2 million in Polymarket trades.
President Donald Trump has supported CFTC oversight, criticizing state officials. In a Truth Social post, he wrote, “Under my leadership, we are setting ‘rules of the road’ that are the Gold Standard for the States. We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!” Chris Christie now advises the AGA.
The sector’s trading volume has grown from about $1.2 billion in early 2025 to over $20 billion by early 2026, alongside major investment activity including a $2 billion round in Polymarket. The dispute continues across courts, legislatures and federal agencies.
Source:
“Kalshi Disputes AGA $1B Prediction Market Tax Claim”, news.worldcasinodirectory.com, Jun 1, 2026
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